Correlation Between Nobel Resources and Québec Nickel

Can any of the company-specific risk be diversified away by investing in both Nobel Resources and Québec Nickel at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining Nobel Resources and Québec Nickel into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Nobel Resources Corp and Qubec Nickel Corp, you can compare the effects of market volatilities on Nobel Resources and Québec Nickel and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in Nobel Resources with a short position of Québec Nickel. Check out your portfolio center. Please also check ongoing floating volatility patterns of Nobel Resources and Québec Nickel.

Diversification Opportunities for Nobel Resources and Québec Nickel

-0.51

Correlation Coefficient

Nobel Resources  Québec Nickel

Excellent diversification

The 3 months correlation between Nobel and Québec is -0.51. Overlapping area represents the amount of risk that can be diversified away by holding Nobel Resources Corp and Qubec Nickel Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Qubec Nickel Corp and Nobel Resources is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on Nobel Resources Corp are associated (or correlated) with Québec Nickel. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Qubec Nickel Corp has no effect on the direction of Nobel Resources i.e., Nobel Resources and Québec Nickel go up and down completely randomly.

Pair Corralation between Nobel Resources and Québec Nickel

Assuming the 90 days horizon Nobel Resources Corp is expected to generate 0.08 times more return on investment than Québec Nickel. However, Nobel Resources Corp is 12.08 times less risky than Québec Nickel. It trades about 0.13 of its potential returns per unit of risk. Qubec Nickel Corp is currently generating about -0.03 per unit of risk. If you would invest  2.22  in Nobel Resources Corp on December 28, 2024 and sell it today you would earn a total of  0.28  from holding Nobel Resources Corp or generate 12.61% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	100.0%
Values	Daily Returns

Nobel Resources Corp  vs.  Qubec Nickel Corp

Nobel Resources Corp

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Nobel Resources Corp are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, Nobel Resources reported solid returns over the last few months and may actually be approaching a breakup point.

Qubec Nickel Corp

Risk-Adjusted Performance

Very Weak

Over the last 90 days Qubec Nickel Corp has generated negative risk-adjusted returns adding no value to investors with long positions. Despite weak performance in the last few months, the Stock's fundamental indicators remain nearly stable which may send shares a bit higher in April 2025. The current disturbance may also be a sign of long-run up-swing for the company stockholders.

Pair Trading with Nobel Resources and Québec Nickel

The main advantage of trading using opposite Nobel Resources and Québec Nickel positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Nobel Resources position performs unexpectedly, Québec Nickel can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in Québec Nickel will offset losses from the drop in Québec Nickel's long position.

The idea behind Nobel Resources Corp and Qubec Nickel Corp pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the Companies Directory module to evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals.